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The Canadian Red Cross has settled charges stemming from one of Canada's worst public-health tragedies, agreeing to pay a $5,000 fine, apologize to those affected and put $1.5-million toward education and research.

In a Hamilton court on Monday, the charity pleaded guilty to violating the Food and Drug Regulation Act by distributing blood tainted with HIV and hepatitis C in the 1980s.

The Crown and lawyers for the Red Cross, in a joint submission, recommended a $5,000 fine - the maximum allowed under the act.

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The judge accepted the lawyers' submissions but won't formally deliver his sentence until June 30.

Thousands of patients were infected with HIV and hepatitis from contaminated blood and blood products.

As part of Monday's agreement, the Red Cross also said it would put $1.5- million into an education and research funds and issue an apology, which was delivered in court via videotape.

"Canadian Red Cross Society is deeply sorry for the injury and death ... for the suffering caused to families and loved ones of those who were harmed," Dr. Pierre Duplessis, secretary-general of the Red Cross, said on the tape.

"We accept responsibility through our plea for having distributed harmful products for those that rely on us for their health."

The $1.5-million will be split into $750,000 for a national endowment scholarship program to provide assistance to students whose lives were affected by the tragedy and $750,000 to set up a national medical error project.

That program will work toward the "eradication of casualties caused by inadequate or improper practices in the health care system."

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"These efforts underscore our belief that justice is also served when it works in productive ways to respond to harm done," Dr. Duplessis said in a statement issued later in the day.

In court, the Crown had said the proposed sentence was reasonable, citing the fact that the Red Cross is no longer engaged in collecting and distributing blood. The Crown also cited the agency's status as a humanitarian organization as a factor in reaching the settlement.

The Red Cross had originally faced six criminal charges stemming from the scandal, including include placing the public at risk by failing to warn of potential dangers and failing to take measures to screen out blood donors infected with HIV-AIDS.

John Plater, a spokesman for the Canadian Hemophilia Society, described Monday's agreement as "historic" for those affected by the tragedy.

"This is the first time in Canadian history that it has been made clear that, at the heart of tainted blood tragedy, laws were broken and that resulted in people's death," he said in an interview.

"For that alone, this is historic."

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Although the Red Cross had originally faced six charges in connection with the scandal, Mr. Plater said the society "recognizes the complications involved with proceeding with the Red Cross."

He added that, the fact that the Red Cross, has agreed to set up the $1.5-million fund also ensures that money goes back to people directly affected.

"Everybody in court admitted that a trial of this matter could have been well over a year and cost an unbelievable amount of money," he said.

The original charges were laid in November, 2002, after a five-year investigation by the Royal Canadian Mounted Police. In total, 32 counts were laid against four individuals, a pharmaceutical company and the Red Cross in connection with tainted blood.

Monday's plea does not affect charges still pending against Dr. Roger Perrault, former head of the agency's blood-transfusion service, that are scheduled for a hearing in Toronto in July. His lawyer, Edward Greenspan, is seeking a stay of charges in that matter, citing the doctor's poor health.

The scandal dates back to the 1980s, when contaminated blood and blood products infected thousands of patients with HIV and hepatitis.

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The Canadian Red Cross did not start testing for the human immunodeficiency virus until eight months after a test was on the market. It did not start screening for hepatitis C until four years after an indirect test for the virus became available.

In 1998, the Canadian Blood Service took over the operations of the blood-transfusion service of the Canadian Red Cross Society, which had operated in Canada for more than 50 years before collapsing under the weight of the tainted-blood tragedy.

With Canadian Press

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